John Poynton’s Managex Funds Management has agreed to purchase The Agency Group Australia’s Western Australian rent roll business for $3.6 million.
John Poynton’s Managex Funds Management has agreed to purchase The Agency Group Australia’s Western Australian rent roll business for $3.6 million.
The ASX-listed real estate agency announced the sales agreement with Managex today, which comprises 1,173 managements.
The deal does not include The Agency Group’s east coast property management business, which consisted of 3,665 properties at the end of June 2020.
Managex is a private company, established by prominent Perth investment bankers and corporate adviser John Poynton, and Kim Slatyer, the managing partner of Emerald Capital Australia.
The Agency Group’s managing director Paul Niardone said the sale of its WA rental roll business was a positive for the business and that it would improve its balance sheet and facilitate greater alignment to its core business.
“The Agency [Group] continues to develop its unique business model, which attracts and incentivises the best real estate sales talent. This sale increases our focus on developing this model while simultaneously increasing our referral power and overall business flexibility,” Mr Niardone said.
“The benefit to our sales agents is that they will have access to a larger pool of sales leads from the growing Managex-owned rent roll and they will also be rewarded for referrals of property managements.”
Under a licence agreement, Managex will use The Agency Group brand in WA with a focus on retaining property management staff.
The Agency Group has also agreed to accommodate Managex at its Perth office, on Milligan Street in the CBD.
As part of the transaction, a reciprocal referral agreement will be entered into by both parties where all sales leads that come from Managex will be referred in to The Agency, while all WA property management leads from The Agency will be referred to Managex.
Managex managing director Kim Slatyer said the partnership with The Agency was the first in a pipeline of acquisitions for Managex.
“Managex aims to acquire, aggregate and manage Australian residential rent rolls,” he said.
“We are well funded and have the operational expertise to aggressively expand in what we see as a growth market.”
“Our strategic alignment with The Agency ensures we have a strong referral partner committed to growing our respective businesses.”
Managex secured debt funding for the acquisition from Judo Bank and the transaction is expected to be completed by the end of Q3 2020 (calendar year).
Proceeds from the sale will be applied to primary bank debt.
Shares in The Agency were unchanged at 4 cents at the time of writing.
